Competitiveness of the Bulgarian Agricultural Sector

V. MINCHEVA

Abstract: The agricultural sector is one of the most protected and heavily regulated sectors in many developed countries and specially in the EU. The result is trade distortion in the world market for agricultural products which makes it harder to achieve economic growth (specially for poor developing countries.). This is one of the main reasons for the trade liberalisation in agricultural products undertaken within the WTO during the last decades. The first major step was the Uruguay Round from 1995. A new round of multilateral negotiations in WTO is being conducted, objecting the continuing of the trade liberalisation process. In general the results from these negotiations are going to be more complex and comprehensive. They are going to lead to substantial reductions not only in the tariff rates but also in domestic support and elimination of export subsidies. Definitely this trade liberalisation is going to affect the competitiveness of the countries and can lead to significant changes in international trade and reallocation of markets. Thus an important question appears and specially how we can define and measure competitiveness in the agricultural sector which can be further used for defining the agricultural policy. So the aim of the article is to chose a method for measurement and to define which of the Bulgarian agricultural products can be considered as competitive. Initially the article gives definition for competitiveness and explains it on the basis of trade theory. It also describes different methods for its measurement. As far as agriculture is concerned special attention is paid to the factors that affect competitiveness in the sector. Further on competitive agricultural products and subsectors are identified using the Index for relative export advantage of Balassa. Specifically the Bulgarian export to third countries is related to the EU export to third countries for the base period of 2002 - 2006. The conclusion is that the Bulgarian agricultural sector is competitive for certain products and subsectors. Taking into consideration the expectations for growing competition as a result of the further trade liberalisation, certain measures must be undertaken for maintaining and improving our competitiveness.

Keywords: Balassa Index; comparative advantages; competitiveness

Date published: 2024-09-04